Intermediate Accounting, Thirteenth Edition

Chapter 10. ACQUISITION AND DISPOSITION OF PROPERTY, PLANT, AND EQUIPMENT

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

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Where Have All The Assets Gone?

Investments in long-lived assets, such as property, plant, and equipment, are important elements in many companies' balance sheets. As the chart on the next page indicates, major companies, such as Southwest Airlines and Wal-Mart, recently reported property, plant, and equipment (PP&E) as a percent of total assets ranging from 56 percent up to nearly 75 percent.

However, for various strategic reasons, many companies are now shedding property, plant, and equipment. Instead, they are paying others to manufacture and assemble products—functions they previously performed in their own facilities. Companies are also reducing fixed ...